In a release on Wednesday, the board of McPherson’s recommended shareholders take no action in relation to the unconditional on-market takeover offer from Gallin Pty Ltd to acquire all shares in McPherson’s for $1.34 per share.
Gallin also confirmed it lodged an unconditional cash offer for the shares it does not already own in the health, wellness and beauty consumer products group, citing several reasons for the coup:
The offer price represents an attractive 9.8% premium to the last close of $1.221
McPherson’s requires urgent strategic and operational change following significant missteps and a poorly executed Chinese market channel strategy
Shareholder confidence in McPherson’s has been eroded and the outlook remains highly uncertain following a December earnings downgrade and CEO departure
Gallin holds a 4.95% interest in McPherson’s
Offer price provides certain and immediate value for MCP shareholders
Gallin Director Nick Perkins, said, “McPherson’s is a business that has lost its way and is in urgent need of reinvigoration across its strategy, governance, and leadership. The company’s performance has disappointed shareholders for some time despite owning a number of quality, attractive brands across key consumer markets.
Gallin is owned by Bennamon Pty Ltd, which is wholly owned by Kin Group Pty Ltd, Raphael Geminder’s family investment company.
McPherson’s Chairman Graham Cubbin said: “The Gallin offer represents a premium of only 9.8% on the prior day closing price and profoundly undervalues the Group. It is materially inadequate and utterly opportunistic. In the Board’s view, Kin Group is implementing a hostile strategy to achieve control or partial control of the company without paying shareholders a fair premium."
McPherson's is undertaking a review of the Bidder’s Statement and will make a formal response and recommendation to shareholders on or before 8 April 2021, which will contain further detail about the performance, strategy and growth objectives of the group.
On Wednesday, McPherson's also announced the appointment of interim CEO Mr Grant Peck as Chief Executive Officer and Managing Director on a permanent basis, effective immediately.